[Because of the length of this novella, I think it's better to take it in two installments, so today I'll simply summarize the story to this point.]
In 1799, Captain Amasa Delano of the Bachelor's Delight, a "sealer and general trader," anchors at an island near the southern end of the Chilean coast to take on fresh water. While there, they spot a Spanish ship with a cargo of slaves drifting nearby. He goes on board the ship, the San Dominick, which shows signs of terrible neglect, and meets its captain, Benito Cereno, who seems to be physically and mentally ill. Cereno, who is supported by an attentive young slave called Babo, tells Delano that the ship had sailed from Buenos Aires one hundred ninety days ago, bound for Lima. There were fifty Spaniards aboard -- the crew and some passengers -- and three hundred slaves. But the ship had been damaged by storms at Cape Horn and had jettisoned most of its cargo. Then everyone was attacked by scurvy, followed by "a malignant fever." All of the officers had died, as had many of the slaves, though a proportionately larger number of the Spaniards had died. The ship, having lost its sails, had been carried by the currents to this point.
Delano offers to supply the ship with water and sails and rigging, and to provide three members of his crew as temporary deck-officers till they reach Lima. He is surprised at some of the things he sees on the ship: The slaves have been given complete liberty of the decks, which seem to be watched over by four elderly black men. There are also six black men who are engaged in polishing a stack of rusty hatchets. At one point a large and powerful-looking black man is brought on deck in chains. Cereno addresses the man as Atufal, and asks if he is ready to ask his pardon. Atufal says no, and Cereno sends him away. Cereno then explains that Atufal is brought before him every two hours and continues to refuse to ask for pardon, having done so now for sixty days. He was a king in his own land, Cereno says, and indicates that he the key to Atufal's lock on a silken cord around his neck. He avoids answering, however, when Delano asks what Atufal's offense was.
Delano also notices that one of the Spanish sailors has made eye contact with him, as if signaling that he wants to speak to him. He begins to suspect that Cereno is not telling him everything, and is a little bothered by the questions Cereno asks about Delano's ship: where it came from (Canton), what it's carrying (silks and some silver currency), how many men he had (twenty-five), and whether they will all be on board tonight. He even asks about the ship's weaponry. Naturally, Delano is suspicious, but he decides to laugh it off.
He notices how solicitous Babo is toward the captain, to whom he administers a "cordial" from time to time, and asks if he might buy the slave from him for fifty doubloons. It is Babo who answers that his master wouldn't sell Babo for a thousand, and then takes Cereno, who seems to be growing more ill, to his cabin. Again Delano catches the eyes of several Spanish sailors, but when he talks to one of them he gets no new information. One of them is engaged in tying an elaborate knot, which he tosses to Delano, saying in English, "Undo it, cut it, quick." But then the sailor moves off, and an elderly black man asks Delano for the knot, then tosses it overboard.
Delano is puzzled, but persuades himself that it all has to do with the peculiarities of Spaniards and blacks. Then the boat from his own ship arrives with the provisions, and there is a great commotion on board that is finally stilled by commands from the four elderly black men. When the supplies are unloaded, Delano sends the boat back and decides to stay on the San Dominick that night so, when the wind picks up, as he expects, he can act as pilot.